Former Enron chief executive Jeffrey Skilling’s prison sentence of more than 24 years for his role in the once-mighty energy giant’s collapse could be trimmed by as many as 10 years if a federal judge approves an agreement reached Wednesday between prosecutors and defense attorneys.
Under the agreement, Skilling’s original sentence will be reduced to between 14 and 171 / 2 years.
The agreement still must be approved by U.S. District Judge Sim Lake, who is set to hold a June 21 hearing in Houston to make the final decision on the sentence.
Daniel Petrocelli, Skilling’s attorney, says the agreement “brings certainty and finality to a long, painful process.”
Justice Department spokesman Peter Carr said the agreement will allow victims of Enron’s collapse to finally receive more than $40 million in restitution. The ongoing status of the case has prevented the government from distributing Skilling’s seized assets to victims, said the agreement.
Skilling’s sentence already was set to be reduced.
Skilling was convicted in 2006 on 19 counts of conspiracy, securities fraud, insider trading and lying to auditors for his role in the downfall of Houston-based Enron. The company collapsed into bankruptcy in 2001 under the weight of years of illicit business deals and accounting tricks. More than $2 billion in employee pensions were wiped out and $60 billion in Enron stock was renedered useless.
Skilling has been in prison since December 2006 and is serving his sentence in a low-
security facility outside Denver.
An appeals court in 2009 upheld his convictions but vacated his more-than-24-year prison term and ordered that he be resentenced, saying a sentencing guideline was improperly applied, resulting in a longer prison term.
Skilling, 59, was the highest-ranking executive to be punished for Enron’s downfall. Enron founder Kenneth Lay’s similar convictions were vacated after he died of heart disease less than two months after trial.
— Associated Press
Thousands of victims of foreclosure abuse got an unpleasant surprise in the mail last week: compensation checks for less money than they were owed.
The Federal Reserve said Wednesday that about 96,000 homeowners who are entitled to a cut of a $3.6 billion settlement with mortgage servicers accused of faulty and fraudulent foreclosures received less than they were owed.
Rust Consulting, a firm hired to distribute the checks, mistakenly sent borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley the wrong amounts but will issue new checks to make up the difference around May 17. The Fed said it became aware of the problem Friday.
In a statement, the central bank said it “directed Rust to distribute the supplemental payments to affected borrowers as soon as possible,” adding that the Fed would “continue to monitor the payments closely.”
A Rust spokesman did not return a call for comment.
— Danielle Douglas
l AOL said Wednesday that its first-quarter net income jumped 23 percent, helped by an increase in global advertising revenue. But its adjusted earnings fell short of Wall Street predictions and AOL shares slumped more than 9 percent in midday trading. The New York-based Internet company earned $25.9 million, or 32 cents per share, for the three months ended March 31, up from $21.1 million, or 22 cents per share, in the same quarter of 2012. Excluding one-time items, the company said it posted an adjusted profit of 41 cents per share. Analysts surveyed by FactSet expected adjusted earnings of 44 cents per share, on average.
l JPMorgan says federal energy regulators are investigating some of its bidding practices in power markets. In a filing with the Securities and Exchange Commission on Wednesday, JPMorgan Chase says it received a “Wells-type” notice from the Federal Energy Regulatory Commission in March. FERC said it may bring action against J.P. Morgan Energy Ventures Corp., JPMorgan Chase and some of its personnel.
l Target just friended Facebook, big time. In its boldest foray into digital retailing, Target on Wednesday launched a test version of Cartwheel, an ambitious collaboration with the world’s largest social network that will allow users to earn savings via Facebook and then use their smartphones to redeem those savings in stores.
l Bankers advising the Federal Reserve urged U.S. regulators to consider preventing Wal-Mart Stores from offering some financial services. The Federal Advisory Council, a body of bankers that includes PNC Financial Services Group and BB&T, said at a Dec. 19 meeting that Wal-Mart’s sales of prepaid cards warranted greater federal oversight. Minutes of the meeting were obtained Wednesday under the Freedom of Information Act. But Wal-Mart spokeswoman Deisha Barnett said in an e-mail: “The financial services products offered at Wal-Mart stores are properly regulated.”
l Toyota’s quarterly profit more than doubled, to $3.2 billion, as cost cuts and better sales worked with a weakening yen to add momentum to the automaker’s comeback. Toyota Motor, which last year reclaimed the title of world’s top-selling automaker, said Wednesday that it expects the strong results to continue in its new business year, which ends March 2014. It projected a $13.8 billion profit, up from $9.73 billion for the year ended in March 2013.
— From news services
l 8:30 a.m.: Weekly unemployment claims released.
l Earnings: Cablevision, Carlyle Group, Dean Foods, Dish Network, Fannie Mae, Orbitz, Priceline.com, Radio One, Skechers, Sotheby’s Zygo.